Lupo v. JPMorgan Chase Bank, N.A.

United States District Court, D. Maryland

June 24, 2016

LOUIS M. LUPOv.JPMORGAN CHASE BANK, N.A., et al.

MEMORANDUM OPINION

DEBORAH K. CHASANOW United States District Judge.

Presently
pending and ready for resolution in this case is a motion for
summary judgment filed by Defendant Specialized Loan
Servicing, LLC ("SLS"). (ECF No. 46). The issues
have been fully briefed, and the court now rules, no hearing
being deemed necessary. Local Rule 105.6. For the following
reasons, SLS's motion for summary judgment will be
granted.

Plaintiff
Louis M. Lupo ("Plaintiff") formerly owned a home
located at 7908 Hunter Lane, North Richland Hills, Texas
76180 (the "Property"). On December 20, 2007,
Plaintiff executed a 30-year fixed-rate promissory note (the
"Note") for $173, 850.00 at a 6.0% annual interest
rate payable to the lender, JPMorgan Chase Bank, N.A.
("Chase"), in monthly installments of $1, 551.24.
The Note was secured by the Deed of Trust (the
"DOT") recorded in Tarrant County, Texas. (ECF No.
46-2). The parties agree that Plaintiff made timely mortgage
loan (the "Loan") payments until November 2012.

Prior
to the transfer of loan servicing to SLS, Plaintiff disputed
his Loan payments with Chase. According to Plaintiff, Chase
"miscalculated and overcharged for escrow" on his
account every year since the inception of the Loan. (ECF No.
18 ¶ 38). Plaintiff contends that Chase made an error in
2013 that he has not been able to resolve. The alleged error
stemmed from an increase in Plaintiff's property taxes
from 2010 to 2011, which prompted Chase to recalculate the
amount that Plaintiff was required to pay into escrow.
According to SLS, the increase in property taxes was
accompanied by an increase in the cost of hazard insurance,
causing a corresponding rise in Plaintiff's monthly
obligation. (ECF No. 46-11, at 2).

Chase
allegedly mailed a "Notice of Assignment, Sale, or
Transfer of Servicing Rights" to Plaintiff, informing
him that Chase could no longer accept payments on the Loan
and that servicing of the Loan had been transferred to SLS
with an effective date of June 17, 2013. (ECF No. 18 ¶
121). At the time servicing rights were transferred to SLS,
the Loan was in default. (ECF No. 46-1 ¶ 5).

SLS
also notified Plaintiff of the transfer and requested that
all Loan payments be sent to SLS rather than to Chase. (ECF
No. 46-3). Plaintiff contends that the payment instructions
provided by SLS on June 20 were illegible. (ECF No. 18
¶¶ 131, 134). On or about June 24, Plaintiff
contacted SLS by telephone to make an electronic payment. The
SLS representative informed Plaintiff that the Loan was in
default and it would not accept his automated clearing house
("ACH") payment. (Id. ¶¶
135-36). Plaintiff explained to SLS that his mortgage loan
account was current and sought an investigation. When he
called thereafter, Plaintiff alleges, he was told that the
investigation was ongoing. (Id. ¶¶
137-40). On July 1, Plaintiff called again and learned that
he could not make his monthly ACH payment because his account
was in default. He was informed that, if he provided proof of
prior payment, SLS would then accept his ACH payment.
(Id. ¶¶ 141-42).

Plaintiff
sent two fax transmissions to SLS on July 1 purporting to
detail proof of his payment history. (ECF No. 46-4). The
faxes, addressed to "Portia, " contain
Plaintiff's partial payment history with Chase. Plaintiff
wrote on the cover sheet for each fax transmission:
"Rejected [ACH] due to inaccurate payment history. Proof
of Payments & ACH enclosed past 20 months."
(Id. at 1, 3). Subsequently, on August 21, Plaintiff
sent another fax transmission, this time to SLS executives:

This is my third "qualified written request"
[("QWR")] under Section 6 of the Real Estate
Settlement Procedures Act [("RESPA")]. I am writing
once again [to] request account reconciliation of my
mortgage, an audit trail for the amount of money claimed owed
by [SLS], and repair of my erroneously damaged credit report.

Although I faxed the required documents to you in June
2013[2]
demonstrating that I was current in my payments, and despite
my multiple telephone conversations with Customer Care and
Executive Services in July, my ACH payments continue to be
refused for my home mortgage.

(ECF
No. 46-5, at 2). SLS responded on September 6, advising
Plaintiff that his prior fax transmissions were not QWRs
under RESPA. (ECF No. 46-6, at 1 ("After our review of
the loan, we have confirmed that our office has not received
a [QWR] prior to your letter dated August 21, 2013.")).
In its correspondence, SLS also briefly summarized
Plaintiff's payment history:

The prior servicer, [Chase], responded to your concerns with
a letter dated April 17, 2013. In the response, [Chase]
indicates that you continued to send the same monthly payment
amount of $1, 501.58 after an escrow analysis statement dated
February 24, 2012 reflected an increase to the monthly
mortgage payment amount. The new monthly mortgage payment was
increased to $2, 020.80 effective May 1, 2012. As a courtesy,
[Chase] applied the May and June 2012 payments based on the
old payment amount.

A new escrow analysis statement was generated on February 4,
2013 by the prior servicer with a new mortgage payment in the
amount of $1, 635.67 effective May 1, 2013. Our records
indicate that we are adhering to the February 4, 2013 escrow
analysis statement. Please note, the account is currently due
for the April 2013 payment which reflects the $2, 020.80
amount as the newer analysis is effective with the May
payment. If a change to the property taxes and/or home
owner's insurance has occurred, please supply us with the
appropriate information so that we may review this matter
further.

The payments made in June and July 2013 in the amount of $1,
501.58 each were transferred to SLS from the prior servicer
and combined to post the April 2013 mortgage payment. This
left a balance in the unapplied/suspense account in the
amount of $982.36. On July 10, 2013, SLS received a stop
payment confirmation for the July 2013 payment that was
initially issued to [Chase]. As such the April 2013 payment
was reversed and the funds remaining for the June 2013
payment were placed into the unapplied/suspense account.

At this time, the [Loan] is currently delinquent. The [Loan]
is due for the April 1, 2013 payment in the amount of $2,
020.80. There is a balance of $1, 501.58 in the
unapplied/suspense account.

We are unable to set up ACH on the [Loan] as the [Loan] is
delinquent. Once the [Loan] has been brought current, please
resubmit your request. We have enclosed a reinstatement quote
for your convenience.

(ECF
No. 46-6, at 1-2). According to SLS, Plaintiff has not made
any payments on the Loan since the July 2013 payment that was
transferred to SLS from Chase. Plaintiff has not made any
payments directly to SLS, nor has Plaintiff attempted to
bring the Loan current. (ECF No. 46-1 ¶¶ 5-6,
11-12).

Furthermore,
on July 11, SLS sent Plaintiff a "Notice of Default and
Notice of Intent to Accelerate, " stating that he was in
default as he had failed to make full payments on the Loan.
(ECF No. 46-9). On July 11 and December 31, SLS provided
Plaintiff the opportunity to begin a trial mortgage
modification under the Home Affordable Modification Program
("HAMP"). (ECF Nos. 46-7; 46-8). Plaintiff did not
advise SLS that he had accepted either of the trial loan
modification offers. (ECF No. 46-1 ¶¶ 13-16). SLS
did not make any report to the credit bureaus concerning the
Loan in June 2013; since then, however, it has reported to
the credit bureaus on a monthly basis that the Loan was in
default. (Id. ¶ 19).

SLS
retained the services of Hughes, Watters & Askanase, L.L.P.
("HWA") to provide pre-foreclosure notice and to
conduct foreclosure proceedings. On December 2, 2014, HWA
sent to Plaintiff by first class mail and certified mail a
"Notice of Maturity/Acceleration of Texas Recourse Loan
and Enclosing Notice of Substitute Trustee's Sale"
(the "Sales Notices"). (ECF Nos. 57-2; 57-3; 57-4;
57-5). Copies of the Sales Notice were also posted on the
door of the Tarrant County Courthouse and filed with the
Tarrant County Clerk prior to December 16, 2014. (ECF No.
57-1 ¶¶ 5-6). The Federal Home Loan Mortgage
Corporation ("Freddie Mac") purchased the Property
at foreclosure auction and has since taken possession through
judicial process in Tarrant County, Texas. (See ECF
No. 46-10).

On
April 16, 2014, SLS moved to dismiss this action pursuant to
Fed.R.Civ.P. 12(b)(6) or 12(b)(3), or to transfer this action
to the United States District Court for the Northern District
of Texas for forum non conveniens. (ECF No. 19). The
court denied SLS's Rule 12(b)(3) and transfer motions but
reserved judgment on the Rule 12(b)(6) motion. (ECF No. 31,
at 6 n.3).

Chase
filed a motion for summary judgment (ECF No. 24), and SLS
filed a renewed partial motion to dismiss Plaintiff's
amended complaint (ECF No. 33). A memorandum opinion and
order granted Chase's motion for summary judgment, and
granted SLS's motion to dismiss under Rule 12(b)(6) in
part and denied it in part. (ECF Nos. 42; 43). Remaining
against SLS are one RESPA count, Counts 14-20 under the
FDCPA, and Counts 26-28 alleging violations of Maryland
consumer protection and mortgage fraud statutes. SLS filed
its answer (ECF No. 44), and the court issued a scheduling
order (ECF No. 45).

On
November 3, 2015, SLS moved for summary judgment on the
remaining claims. Plaintiff was provided with a
Roseboro notice, which advised him of the pendency
of the motion for summary judgment and his entitlement to
respond within 17 days. (ECF No. 47); see Roseboro v.
Garrison, 528 F.2d 309, 310 (4thCir. 1975)
(holding that pro se plaintiffs should be advised of
their right to file responsive material to a motion for
summary judgment). Plaintiff responded in opposition (ECF No.
50), and SLS replied (ECF No. 57).[3] The court stayed the
scheduling order pending resolution of SLS's summary
judgment motion. (ECF Nos. 58; 60).

The
moving party bears the burden of showing that there is no
genuine dispute as to any material fact. If the nonmoving
party fails to make a sufficient showing on an essential
element of his or her case as to which he or she would have
the burden of proof, then there is no genuine dispute of
material fact. Celotex, 477 U.S. at 322-23.
Therefore, on those issues on which the nonmoving party has
the burden of proof, it is his or her responsibility to
confront the summary judgment motion with an "affidavit
or other evidentiary showing" demonstrating that there
is a genuine issue for trial. See Ross v. Early, 899
F.Supp.2d 415, 420 (D.Md. 2012), aff'd, 746 F.3d
546 (4th Cir. 2014). "A mere scintilla of
proof . . . will not suffice to prevent summary
judgment." Peters v. Jenney, 327 F.3d 307, 314
(4th Cir. 2003). "If the evidence is merely
colorable, or is not significantly probative, summary
judgment may be granted." Liberty Lobby, 477
U.S. at 249-50 (citations omitted). In other words, a
"party cannot create a genuine dispute of material fact
through mere speculation or compilation of inferences."
Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001)
(citation omitted); see Bouchat v. Baltimore Ravens
Football Club, Inc., 346 F.3d 514, 522 (4th
Cir. 2003).

"Although
pro se litigants are to be given some latitude, the
above standards apply to everyone. Thus, as courts have
recognized repeatedly, even a pro se plaintiff may
not avoid summary judgment by relying on bald assertions and
speculative arguments." Smith v. Vilsack, 832
F.Supp.2d 573, 580 (D.Md. 2011) (citations omitted).

III.
Analysis

SLS
argues that the statements contained in its communications
were accurate and that all delinquencies, defaults, and late
charges are attributable to Plaintiff's decision to not
pay the full amount of the mortgage payment when due. The
amount Plaintiff needed to pay into escrow rose due to a
substantial increase in property taxes and a comparatively
smaller increase in hazard insurance premiums. At bottom,
according to SLS, the Loan fell into default when Plaintiff
refused to pay the increased amount. (ECF No. 46-11, at 1).

A.
RESPA

Plaintiff
asserts that SLS violated RESPA by failing to acknowledge
receipt of his QWRs. See 12 U.S.C. § 2605(e).
Congress enacted RESPA "to insure that consumers . . .
are provided with greater and more timely information on the
nature and costs of the settlement process" and "to
effect certain changes in the settlement process for
residential real estate, " such as the reduction of
"the amounts home buyers are required to place in escrow
accounts established to insure the payment of real estate
taxes and insurance." 12 U.S.C. §§ 2601(a),
(b)(3). RESPA requires that servicers of a "federally
related mortgage loan" take certain actions and provide
certain written responses within specified periods of time
after receiving a QWR from a borrower. According to §
2605(e)(1)(A): "If any servicer of a federally related
mortgage loan receives a [QWR] from the borrower . . . for
information relating to the servicing of such loan, the
servicer shall provide a written response acknowledging
receipt of the correspondence within [20] days (excluding
legal public holidays, Saturdays, and Sundays)."[4] Triggering
certain duties under RESPA, a QWR is defined in §
2605(e)(1)(B) as:

[A] written correspondence, other than notice on a payment
coupon or other payment medium supplied by the servicer,
that--

(i) includes, or otherwise enables the servicer to identify,
the name and account of the borrower; and

(ii) includes a statement of the reasons for the belief of
the borrower, to the extent applicable, that the account is
in error or provides sufficient detail to the servicer
regarding other information sought by the borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Here,
the sole remaining RESPA count concerns Plaintiff&#39;s July
1, 2013 fax transmissions. (ECF No. 42, at 45; see
ECF No. 46-4). SLS argues that "[a]s was the case with
the alleged QWRs that Plaintiff claims to have sent to Chase,
Plaintiff's fax to SLS was not a QWR because it was not
sent to the separate and exclusive address provided for
[QWRs]." (ECF No. 46-11, at 5). In other words,
according to SLS, Plaintiff's July 1 faxes do not satisfy
the statutory QWR definition because "[i]nstead of
sending his correspondence via mail to the ...

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